Lottery Advertising and Marketing


The word lottery traces back to ancient times, as does the concept of chance-based prize allocation. The game grew in popularity during the 1700s as the United States developed, and the Continental Congress used lotteries to raise money for the Revolutionary War. In the United States, there are a number of different types of lotteries, including state-sponsored lotteries and privately run online and paper-based games. Some states prohibit certain types of lotteries, while others endorse them and regulate them.

Lotteries typically offer multiple prizes, including cash, goods or services, or even a franchise for a business opportunity. A percentage of the total pool is normally taken by the organizers or sponsors of the lottery, and the remainder may be awarded to winners. In addition, costs of organizing and promoting the lottery must be deducted from this fund. As a result, the actual odds of winning are much lower than advertised.

Despite the fact that the chances of winning are very low, many people continue to buy lottery tickets and dream of becoming rich through luck. This is not irrational; it is a rational decision if the expected utility of the ticket outweighs the disutility of a monetary loss. The desire for wealth and the belief that hard work pays off are strong motivating forces in modern society. Combined with this desire, lottery advertising and marketing tactics are designed to keep players hooked. These techniques are not all that different from those used by tobacco companies and video-game manufacturers, but they aren’t normally done under the auspices of government.

A key message that is pushed by lottery promoters is that the proceeds help to subsidize public services. The problem with this is that the amounts generated by lotteries are a drop in the bucket when compared to overall state revenue. In addition, the message obscures that a large portion of lottery profits go to the promoter, not to charitable causes.

In the nineteen seventies and eighties, as the income gap widened, job security and pensions diminished, health-care costs rose, and inflation accelerated, Americans’ old assumptions about rising financial security began to fall apart. They could no longer rely on the old promise that a lifetime of work would render them better off than their parents. In this environment, lottery proponents reframed their case. No longer arguing that a lottery would float a state budget, they argued that it could pay for a particular line item—usually education but sometimes elder care or public parks.

The result was that people who might not have approved of gambling as a form of taxation were able to vote for it under the cover of supporting education or other worthy programs. In this way, the lottery became a kind of moral crutch that enabled many state governments to expand their social safety nets without onerous increases in general taxes on middle-class and working people. It was a strategy that worked, at least until the Great Recession.